New Energy stripped of millions from its budget

The newly reconstituted Colorado Energy Office will have to operate with far less money than it has received in the past few years, resulting in fewer dollars for renewable energy projects.

The energy office next year will operate with $3.3 million in state funding and $472,000 in federal support. That’s almost $700,000 less than the $4.4 million in federal and state funding the energy office received in 2008. It’s also much less than the $7.5 million it received in 2007 under Gov. Bill Ritter, a renewable energy proponent.

During Ritter’s years as governor, the energy office focused entirely on renewable energy. But now, under legislation signed into law by his predecessor, John Hickenlooper, the office will now broaden its mission to include fossil fuels initiatives.

Pete Maysmith, executive director of Colorado Conservation Voters, said he wished more funding existed for the energy office to incubate renewable energy projects.

Maysmith appeared resigned to the idea that no such dollars would be found, at least any time soon.

“Given that we’re in an era of constrained resources, I think the office is in a decent place from a budget perspective,” he said.

Environmental groups are happy that the office was not simply eliminated. That was possible given a cash-strapped state government that had relied almost entirely on $64 million in economic stimulus money to fund the office since 2009.

House Bill 1315, sponsored by state Rep. Jon Becker, R-Fort Morgan, may be the only reason the office remains in existence, said conservationists.

“Without the legislation, the funding would have been gone, and we would not have any energy office under the governor’s direction,” said Nichole Goodman, policy director for the Alliance for a Sustainable Colorado. “So, we’re really glad that the state Legislature came together and fashioned a long-term funding solution.”

Hickenlooper, whose administration backed the measure as it made its way through the Legislature, signed the bill into law in late May. The law alters the mission of the energy office, once centered on renewables, to include traditional energy sources such as oil, coal and natural gas to create a balanced energy office.

Specifically, the law creates two funds, the clean and renewable energy fund, and the innovative energy fund, which will receive about $1.5 million apiece annually during the next five years.

“We’re guaranteed our general fund for five years, as well as the severance tax dollars,” said Tracee Bentley, associate director for policy and legislation at the Colorado Energy Office.

Bentley worked with Becker, the state representative, on the bill.

The energy office will draw from the clean and renewable energy fund to attract renewable energy industry investment in the state, aid technology transfer and provide market incentives, among other activities. These activities will receive dollars from the general fund.

Funded by oil and gas severance tax revenue, the innovative energy fund will support initiatives that increase the efficiency of fossil fuels. As an example, it could fund work related to Hickenlooper’s initiative to add natural-gas vehicles to municipal fleets.

The bill also saves a program that provides money for schools to adopt wind power, while nixing a program that converts trucks to fuels that reduce their emissions.

The bill passed the Senate in April by a unanimous 35-0 vote, but saw some opposition from Democrats in the House, which passed the bill 49-16.

When he determined the bill would pass, state Rep. John Kefalas, D-Fort Collins, voted against it in a symbolic move to support the energy office’s original mission: renewable energy.

That function will be diluted under current law, he said.

“The (energy office) was instrumental in branding Colorado as a leader in clean energy,” he said. “My vote was just to send the message that Colorado should continue to be a leader in renewable and sustainable energy.”

Even before the bill passed, the Colorado Energy Office had cut about 20 positions as stimulus money dried up. It also has turned into a policy and research shop, as it can no longer afford to do things like distribute appliance rebates or install solar panels, Bentley said.

The office’s efforts now will shift to recommending policy to legislators after working with renewable and fossil fuel companies.

Colorado Conservation Voters, which opposed a similar bill that failed last session, ended up supporting the bill that Hickenlooper signed into law.

“We do believe strongly that this office is critical to continue driving Colorado forward as a leader in the renewable energy sector,” said Maysmith.

Two key provisions in this year’s bill changed the organization’s mind. First, the bill ensures that the energy office will get money for a period that’s certain, which aids market stability for the renewable energy industry.

Second, the innovative energy fund prohibits gifts and grants to companies and focuses on fossil-fuel efficiency. Last year’s bill included neither provision.

“I think that’s a great move: Continuing funding for renewable energy and efficiency,” said Goodman, the Alliance for a Sustainable Colorado policy director. “The funding helps to minimize environmental impact of the ongoing production and consumption of traditional energy.”